Utility Maximization Economic Test

Question: Describe about the Utility Maximization for Economic Test. Answer: Utility Maximization I enjoy taking tea with biscuits especially in the morning before attending the classes. With $1.5, I am capable of buying either 1 cup of tea and five slices of bread or two cups of tea with two slices of bread. Indifference between the two products is brought about by the satisfaction I derive after consuming the two complements. This means that the level of satisfaction obtained after consuming either 1 cup of tea with five slices of bread or 2 cups of tea and four biscuits will be the same. Last week, I happened to have done well in my economics test. As an appreciation, my course instructor gave me $5. Part of the money was used to but the essentials while the rest was directed to my morning breakfast. From spending $1.5 on breakfast, I started spending $2. With $2, I was able to take either 1 cup of tea with 8 eight slices of bread or two cups with five slices of bread. This means that with an increase in the budget, I was also able to increase my level of consumption. The utility maximization rule says that the consumer derives the same level of satisfaction across all the goods after spending the last dollar. (Aruka, 2011). I always feel the same level of satisfaction after the $1.5 on my breakfast regardless of the consumption I decide to take. This relates to my budget constraint in such a way that as a rational consumer, I can't spend more than what I have. That is, consumption bundle should operate within my budget constraint. Reference Aruka, Y. (2011).Complexities of production and interacting human behaviour. Heidelberg: Springer Verlag.